After the Bell: Grains, Soy Post Small Corrective Gains Watching South America Weather

Corn: Corn futures finished around 2 cents higher today. For the week, March corn futures dropped 4 3/4 cents. Unless the partial government shutdown unexpectedly ends and USDA offices reopen, corn traders will be without fresh demand news again next week. That would likely continue to limit buyer interest, though support could start ...

Corn: Corn futures finished around 2 cents higher today. For the week, March corn futures dropped 4 3/4 cents. Unless the partial government shutdown unexpectedly ends and USDA offices reopen, corn traders will be without fresh demand news again next week. That would likely continue to limit buyer interest, though support could start to build if Brazilian weather remains hot and dry through key growing regions. The Brazilian crop focus should be greater by February, as the bulk of the full-season corn crop will be into its critical development stage and safrinha corn planting will be well underway. A continuation of the current erratic weather pattern could be supportive. Given declining global corn supplies, it would be more supportive if there’s a legitimate threat to the safrinha crop.

Soybeans: Futures ended higher and near midrange in quiet, consolidation trade after steep losses Thursday. March futures rose 3 ½ cents to close at $9.10 1/4, that was down 11 ¼ cents for the week. Soybean meal lost $4.40 this week to close at $314.60 and March bean oil was down 23 points at 28.41 cents. The updated South American weather outlooks will be the focus after Friday’s midday forecast was slightly wetter from the overnight run, with local areas seeing better rain across north-central Brazil. However, the broad trend is below-normal rainfall across parts of Brazil while above-normal rain is forecast across the northern third of Argentina. The overall pattern reflects “stagnation” and increased yield risks. The areas that are dry will get drier, while flooding becomes a worsening problem for northeast Argentina. President Donald Trump speaks at the annual America Farm Bureau Federation meeting in New Orleans on Monday. Traders will be hanging on every word in hopes he mentions what China may have agreed to buy during this week’s U.S./China trade talks. News on the U.S/China trade front and weather in South America will dominate trading. Reopening the government and USDA scheduling new release dates for its production and WASDE reports will be eagerly awaited. More important will be updates on exports sales that have been halted for three weeks.

Wheat: Futures ended higher Friday and finished mixed this week after paring earlier-session gains. March SRW rose 5 ¾ cents to settle at $5.19 ½, up 2 ½ cents for the week. March HRW futures gained 5 ¾ cents to $5.04 ½ and down 1 ½ cents this week. March spring wheat slipped ¼ cent this week to close at $5.70. Prices shot up in early trading on rumors the Russian Ag Ministry is calling for another meeting to discuss wheat prices and export limits after exporters sold 415,000 metric tons to Egypt this week, boosting domestic prices. Traders will be watching for an official announcement of a meeting next week, suggesting more demand for U.S. high-quality wheat. Talk the Ukraine government is running low on cash and may have to slow or halt value-added tax rebates to exporters will be closely watched for confirmation next week. With the government now shut for a third week, traders are eager to see sales tallies once the USDA reopens.

Cotton: Nearby cotton futures prices closed down 33 to 36 points and nearer their daily lows today. For the week, March cotton gained a paltry 6 points. A third week of no USDA weekly export sales data continues to leave the cotton market uncertain if the sharp break in futures prices last month helped to spur fresh overseas demand. The uncertainty regarding the U.S. cotton sales export pace and lack of any details about the size and timing of any Chinese cotton purchases that may have been negotiated during this week’s trade talks in Beijing are bearish elements for the cotton futures market. President Donald Trump closed off the only live negotiation on Capitol Hill to resolve the partial government shutdown, now poised to become the longest in U.S. history on Saturday. The shutdown delayed the release of USDA’s annual Crop Production and WASDE reports that were due out today. The lack of current supply and demand data from the U.S. has cotton traders leaning on the "outside markets" for direction, including the U.S. dollar, the U.S. stock market and crude oil prices. Price action in those markets next week will likely drive the cotton futures market.

Hogs: February lean hog futures ended down $1.42 ½, with the April contract down 47 ½ cents and July down $1.325. The July contract scored a nine-week low today. For the week, February lean hogs gained 82 1/2 cents. Despite the cash price pause, it still looks like the market has made its seasonal low. February lean hog futures prices have been gaining on April this year, further suggesting that a low in the cash market has been established. Rising slaughter levels have been matched by rising wholesale pork sales as packers continue to sell meat. Pork remains at a wide discount to beef, helping to keep pork a favorite feature for grocers. China demand for U.S. pork has been talked about since the August discovery of African swine fever in China hog herds. Traders will be listening closely to President Trump’s speech to the American Farm Bureau on Jan. 14 for any details on quantities the two sides negotiated during their meetings this week.

Cattle: Live and feeder cattle cattle futures closed mixed on Friday. February live cattle rose 10 cents to $124.975 after reaching a new contract high at $125.65 this morning. Prices rose $4.05 this week. Little cash trade took place before the close, with packers trying to buy steady and feedlots asking $2 higher. Futures premiums suggest the market is looking for higher prices into next week. Rain and snow in parts of the central Plains to end this week will begin to melt next week and leave some feedlots muddy, curbing weight gains. Some finished cattle are coming in more than 40 pounds light after adverse weather earlier. Feedlots may have to market more cattle ahead of wheat might be worse performance to close out January. Midday beef prices fell $1.14 for Choice and 63 cents of Select on Friday. The story the next month will remain seasonally smaller supplies and generally good beef demand. Add in some additional weather problems and that suggests stronger fed cattle prices. Although, packers remain very reluctant to give up positive margins they have enjoyed for most of the last 10 months.